Thursday, 16 June 2016

Why do I tip my taxi driver, but not my accountant? I mean, there’s a good reason I don’t - he would narrow his eyes at me and ask if I was feeling ok. But why, in general, do we tip in some service contexts and not others; is it simply due to a quirk of history or the result of broader psychological patterns? Cornell University’s Michael Lynn suspected the latter, and in his new study published in the Journal of Economic Psychology, he outlines the evidence for various pro-tipping motives.

Lynn presented a list of 122 American service occupations – including architect, bus tour guide, shampooer – to just under 1200 participants recruited online. Their task was to rate each role on one of 13 different measures including the typical working conditions for the job, how difficult they thought the job was, how well-paid, or the crucial question of how likely they would be to tip someone doing this job for them.

Lynn had chosen these measures carefully, to test out different hypotheses about tipping and reward. For example, participants said they were more likely to give tips to the same service occupations that were perceived to be low-income, consistent with motives related to altruism and egalitarianism; after all, a bit of extra cash in my accountant’s pocket isn’t likely to lift them from want, nor to redress the scales of society.

It might also be that we tip in contexts where we might gain or lose approval from others – a social status motive. Here the results were less compelling: participants were not more willing to tip in roles where the act can be witnessed by others, which you would expect if tipping was about making yourself look good. However, tipping was more common when participants thought people in the role were usually much less happy than their customers, like the taxi drivers who take revellers to and from parties, or holidayers to airports. Lynn treats this as evidence for wanting to avoid disapproval but I wonder if the finding could be another instance of egalitarianism, using money to compensate for poorer working conditions.

Finally, participants liked to tip in situations where they felt they were in a better position than a manager to evaluate the work of an employee. It’s hard for me to know whether an X-ray technician has done a good job, but I probably have a better sense of the quality of my tour guide’s work today than his manager back at the office. This factor appears quite important, as it explains why jobs (like massage) that require more physical contact, and those that are highly customised, seem more tip-worthy.

Some of the predicted motives didn’t pan out, notably one that any classical economist might expect: that tips are used as an incentive for improved future service. If this was the case, Lynn predicted, we’d prefer to tip roles that involve repeat service, and also those involving extended contact with the customer, giving the service provider more opportunities to maximise their performance for the hope of reward. But participants preferred to tip those kind of roles less, not more. Possibly this is confounded by an unmeasured variable – maybe more contact humanises the service provider, and so the encounter becomes more personal and less transactional – but in any case, it’s a surprising result.

Sophisticated businesses may want to go against the tipping status quo: introducing tips to make the job more attractive to prospective employees and to motivate those in the job, or conversely to remove them, to standardise service and avoid tax complications. But this new research suggests such counter-normative policies may meet with resistance from customers. For example, Uber decided to discourage tipping by not allowing it through the app system. The work of these ride providers is easily evaluated and customisable, low income, and likely less fun than the experience of those enjoying the ride. The response from customers? Petitioning Uber to let them tip.

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Lynn, M. (2016). Why are we more likely to tip some service occupations than others? Theory, evidence, and implications Journal of Economic Psychology, 54, 134-150 DOI: 10.1016/j.joep.2016.04.001